PurposeTo compare the outcomes of treating large cartilage defects in knee osteoarthritis using human allogeneic umbilical cord blood‐derived mesenchymal stem cell (hUCB‐MSC) implantation or arthroscopic microdrilling as a supplementary cartilage regenerative procedure combined with high tibial osteotomy (HTO).MethodsThis 1‐year prospective comparative study included 25 patients with large, near full‐thickness cartilage defects (International Cartilage Repair Society grade ≥ IIIB) in the medial femoral condyles and varus malalignment. Defects were treated with hUCB‐MSC implantation or arthroscopic microdrilling combined with HTO. The primary outcomes were pain visual analogue scale and International Knee Documentation Committee subjective scores at 12, 24 and 48 weeks. Secondary outcomes included arthroscopic, histological and magnetic resonance imaging assessments at 1 year.ResultsFifteen and 10 patients were treated via hUCB‐MSC implantation and microdrilling, respectively. Baseline demographics, limb alignment and clinical outcomes did not significantly differ between the groups. Cartilage defects and total restored areas were significantly larger in the hUCB‐MSC group (7.2 ± 1.9 vs. 5.2 ± 2.1 cm2, p = 0.023; 4.5 ± 1.4 vs. 3.0 ± 1.6 cm2, p = 0.035). The proportion of moderate‐to‐strong positive type II collagen staining was significantly higher in the hUCB‐MSC group compared to that in the microdrilled group (93.3% vs. 60%, respectively). Rigidity upon probing resembled that of normal cartilage tissue more in the hUCB‐MSC group (86.7% vs. 50.0%, p = 0.075). Histological findings revealed a higher proportion of hyaline cartilage in the group with implanted hUCB‐MSC (p = 0.041).ConclusionhUCB‐MSC implantation showed comparable clinical outcomes to those of microdrilling as supplementary cartilage procedures combined with HTO in the short term, despite the significantly larger cartilage defect in the hUCB‐MSC group. The repaired cartilage after hUCB‐MSC implantation showed greater hyaline‐type cartilage with rigidity than that after microdrilling.Level of EvidenceLevel II, Prospective Comparative Cohort Study.